Unemployment and Economic Growth in Nigeria in the 21st Century: VAR Approach
Unemployment and Economic Growth in Nigeria in the 21st Century: VAR Approach

Summary/Abstract: This study investigates the impact of unemployment on economic growth in Nigeria in the 21st century using a Vector Auto regressive (VAR) approach using a secondary data spanning from 1986 to 2015. It aims at examining the dynamic effect of unemployment on growth in the context of Nigeria using the VAR approach to analyse the variations. Different methods such as the Augmented Dickey Fuller (ADF) test, johansen cointegration test, VAR model, impulse response test and variance decomposition test were employed to analyse the data. It was observed that the impact of unemployment vary over time as effort towards eradicating it are been made by the government in the country. The implication of the study is to inform researchers on the VAR model as an appropriate approach for dynamic analysis, to urge academicians to be more informative on the dynamic effects of unemployment in the economy, and to provide guidance to the government on the appropriate policy to adopt to tackle the issue of unemployment and inflation in the country. This study recommends increase in government expenditure towards the enhancement of individual skills in order to reduce unemployment and inflation.

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